Vision Payroll

States continued their crackdown on employers with overtime violations as New York announced a $1.23 million settlement with Finkelstein Morgan LLC and J. Siebold Construction Corporation (“Siebold”). The settlement represents all the unpaid overtime for the period from October 2002 through August 2006 plus damages. Siebold employed the workers to renovate several building owned or managed by Finkelstein Morgan. During that time period 284 employees who worked more than forty hours were paid straight time and not time-and-a-half as required by state and federal law.

A wage garnishment is when an employer, generally as a result of a court order, withholds an amount from an employee’s earnings in payment of a debt. Restrictions on wage garnishments are defined in Title III of the Consumer Credit Protection Act. §303 of Title III restricts the amount of most garnishments to the lesser of 25% of the employee’s “disposable earnings” or the amount by which the employee’s disposable earnings exceed 30 times the Federal minimum wage. Disposable earnings for this purpose generally means gross wages less deductions required by law. Voluntary deductions not required by law are not included in the calculation of disposable earnings. With the recent increase in the federal minimum wage, the calculation of the maximum garnishment amount has changed. For employees with disposable earnings greater than $262.00 ($6.55 X 40), a maximum of 25% can be garnished. For employees with disposable earnings less than $262.00 but more than $196.50 ($6.55 X 30), the garnishment equals the amount by which disposable earnings exceed $196.50. For employees with disposable earnings of $196.50 or less, no garnishment is allowed. There are exceptions for child support, alimony, certain bankruptcy court orders, and debts for federal and state taxes. A state law that allows a smaller garnishment takes precedence over the federal law. There are also different calculations for some other debts owed to the federal government and its agencies. Contact Vision Payroll if you have any questions on calculating the correct amount of garnishments on employee’s wages.

An employee required to launder his work aprons by Starbucks Corporation (“Starbucks”) was not entitled to compensation under California law (Douglas O’Connor v. Starbucks Corporation, ND Cal, C 06-3706 VRW, July 14, 2008). Under an explanation of the relevant regulations by the California Industrial Wage Commission, “[e]mployers must maintain or provide a maintenance allowance for uniforms requiring ironing or dry cleaning or uniforms requiring special laundering for heavy soil.” In granting summary judgment, the court ruled that “Starbucks owes plaintiff a duty to pay such compensation only if the aprons require laundering separate from plaintiff’s regular laundry.” Since O’Connor, a former Starbucks barista, was unable to establish that the aprons required either dry cleaning or laundering separate from other articles as he had maintained, Starbucks owed no duty to compensate him.

The US Department of Labor proposed a rule change that would require participants in 401(k) plans to receive “investment-related information in a comparative chart or similar format.” The chart could be based on a model chart designed by the Department of Labor or a plan fiduciary could design a different chart or use a comparative format to relay the information. On a regular basis, participants would receive “basic information about the plan and its investment options, such as what options are available under the plan, how to give investment instructions, investment returns and fees and expenses, and how to obtain more detailed information.” The proposed regulation would be effective for plan years beginning after December 31, 2008.

This week’s question comes from Kevin, HR Director: One of my employees is applying for a mortgage and needs several pay stubs. Unfortunately, he threw his away. What’s the best way to get them? Answer: Online Employer’s Employee Services is a self service, web-based product providing employers and their employees on-line access to personnel information, check stubs, time off accruals and more. Our web-based solution enables employees to access information 24 hours a day, 365 days a year. Give employees instant access to information they need, when they need it. Vital data is protected to ensure that employees can view information without compromising data. Information is shared between Employee Services and payroll so there’s no need to perform manual data entry of all employee information. Employees can view their information and update select fields. Supervisors have access to information about their direct reports. A complete library of reports exportable to Excel is also available. You won’t believe the time you save when employees get their information from Employee Services, not you.

According to the US Department of Labor, in the week ending July 19, the advance figure for seasonally adjusted initial claims was 406,000, an increase of 34,000 from the previous week’s revised figure of 372,000. The 4-week moving average was 382,500, an increase of 4,500 from the previous week’s revised average of 378,000.

On July 13, 2008, a new law went into effect mandating treble damages for wage and hour violations by Massachusetts employers. Prior to passage of Chapter 80 of the Acts of 2008, triple damages were allowed, but treated as discretionary by state judges. Generally, employers who acted in good faith were not assessed treble damages under the old law. Now, employers’ intent is irrelevant and three times the lost wages or other benefits will be awarded on all wage and hour lawsuits where the plaintiff prevails. Employers will also be required to pay “the costs of the litigation and reasonable attorneys’ fees.” We strongly recommend that all Massachusetts employers review their wage and hour policies and consult with their attorneys if they have any questions.

Would you like to improve cash flow, eliminate annoying workers’ compensation audits, and save money? Who wouldn’t? Ask today about pay-as-you-go workers’ comp setup in conjunction with our insurance partners. As payroll is prepared each week, your workers’ comp premium is also calculated. The premium is automatically debited from your account. There’s no huge down payment, no misclassified workers, and no huge audit bills to pay at the end of the policy period. With pay-as-you-go workers’ comp from Vision Payroll, workers’ comp is not such a chore now, is it?

The Social Security Administration (SSA) announced a new online calculator that will provide immediate and personalized benefit estimates to help people plan for their retirement. According to the SSA, the calculator produces estimates that are based on your actual Social Security earnings record. You will need to provide your name, Social Security number, date and place of birth, and mother’s maiden name. You will be provided an estimated monthly benefit for an early retirement, full retirement, and a late retirement based on certain earnings assumptions.

Jerry and James Schram, brothers and business partners in Schram’s Excavating of Vancouver, WA agreed to pay $356,000 in back wages and unpaid workers’ compensation premiums. As part of a guilty plea, both brothers were given two years probation and 240 hours of community service. Jerry Schram will also serve 30 days in jail as part of the settlement. The back wages were to compensate employees who did not receive overtime pay even though they worked more than 40 hours a week. Schram’s Excavating pled guilty to hiding information used to set their workers’ comp premiums, which resulted in the company paying lower premiums.